Author Archives: Scalper1

Qunar’s Airline Battle Won’t Slug No. 1 Chinese Agency Ctrip: ITG

Qunar ‘s ( QUNR ) ongoing dispute with China’s airlines won’t hurt China’s No. 1 online travel agent Ctrip.com ( CTRP ), which is expected to report March-quarter travel sales that doubled vs. last year, ITG analyst Henry Guo said. Ctrip and Qunar stocks split on the stock market today , with shares of Ctrip 1.7%, as Qunar fell 1.5%. IBD’s 11-company Leisure-Travel Booking industry group was up a fraction. For Q1, Guo expects Ctrip to report 4.19 billion to 4.29 billion yuan ($640 million to $650 million), topping the consensus view for 4.16 billion yuan. Ctrip hasn’t yet set a date for its Q1 earnings release. That outperformance would follow a months-long battle with flagship carrier Air China — along with some other local airlines including Hainan Airlines and its Hong Kong Airlines unit, as well as China Eastern’s Shanghai Airlines — over fees charged by booking agents such as Qunar. Ctrip acquired a stake in Qunar after the two formed a partnership last year. In the wake of airlines’ refusal to list on Qunar.com, the site now directs users to Ctrip.com or to airlines’ official websites, Guo wrote in a research note. “We believe this should help drive Ctrip’s organic transportation revenue growth and partially offset Qunar’s air-ticketing weakness,” he wrote. Hotel occupancy in China fell to 53.1% in Q1 from 53.6% in the prior quarter, Guo said, but revenue per available room surged 2.2% year over year, “suggesting improved monetization for the whole hotel industry.” At the same time, he says  InterContinental Hotels Group ( IHG ) and Hilton Worldwide ( HLT ) reported 8.3% and 8% year-over-year growth for their Chinese operations, respectively, and Marriott International ( MAR ) saw revenue per available room in Asia rise 6.8% vs. last year. Guo expects Ctrip to report a 76% to 86% jump in accommodations sales vs. the year-earlier quarter, topping the company’s guidance for 70%-80% growth. He sees Ctrip’s travel segment more than doubling revenue. Packaged tours — one of Ctrip’s growth engines — has benefited from outbound travel to high-demand destinations like Japan, South Korea and Southeast Asia, Guo wrote. Relaxed visa requirements have helped fuel outbound travel. He expects 52% year-over-year growth in this segment.

Verizon Pain From Strike Seen Growing; Wells Fargo Cuts Estimates

Verizon Communications ( VZ ) is starting to feel the pain from the ongoing strike by nearly 40,000 wireline workers, according to Wells Fargo, which on Friday lowered its Q2 and full-year profit-margin and revenue estimates for the telecom giant. Two unions representing about 39,000 Verizon landline workers, including those that work on its FiOS TV and broadband services, went on strike April 13. Verizon’s wireless workers, however, are not unionized, except for roughly 100 employees. Verizon has a total workforce of nearly 178,000. “While the striking employees are almost all wireline workers, we believe the strike has become a distraction to its wireless operations. VZ has been less promotional with its wireless offerings in Q2, and recent checks have shown some unfavorable (customer-switching) trends,” Wells Fargo analyst Jennifer Fritzsche said in a research report. Verizon and the two unions — the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) — have reopened talks, with a federal mediator involved. “While a federal mediator has the two sides back at the bargaining table, a near-term resolution is still unclear,” Fritzsche wrote. “Management recently indicated that install and order activity for FiOS has ‘significantly dropped’ as employees have been primarily focused on repair and maintenance. “Accordingly, we are cutting our Q2 and 2016 wireline revenue estimates by $343 million and $826 million. We are also lowering our Q2 and 2016 wireline margin estimates.” Verizon stock rose 3 cents to 49.66 in the stock market today , and it’s mostly been trading below the key 50-day line since touching a 16-year high of 54.49 on April 5. Verizon is widely regarded as the  front-runner to acquire Web portal Yahoo ( YHOO ).

How High Will Tesla/Apple Supplier Nvidia Go? Up 34% In 2 Months

Loading the player… Nvidia ( NVDA ) — chip supplier for  Apple ( AAPL ) and Tesla Motors ( TSLA ) — has been on a huge run lately, gaining more than 30% in the past two months. But how much higher can the top-rated stock go? While Nvidia is probably best known for being a Tesla partner, it has also supplied graphics chips for Apple computers and is involved in the budding virtual reality market. Jefferies is bullish on the stock and said last week that Nvidia is just starting to benefit from trends in the auto, data center, PC gaming and VR markets. The analyst believes the company can more than triple its annual EPS in three years. Nvidia broke out of a cup-with-handle base about eight weeks ago and pulled back to find support at the 50-day line. It then surged to a new all-time high and profit-taking zone after its view-topping quarterly report last week and has continued higher since. It’s now up about 34% from the buy point and rose 1.8% Friday. Top-Rated Peers Performing Well Nvidia has a highest-possible IBD Composite Rating of 99. Two of its highly rated chip peers have also been performing particularly well as of late: Silicon Motion ( SIMO ) and MaxLinear ( MXL ). Silicon Motion broke out of a big cup-with-handle base in March and is now trading in profit-taking territory and at all-time highs. Its stock climbed 3.8% on the stock market Friday. MaxLinear broke out of a consolidation base last week and is trading in buy range. It rose 1.7% Friday.